If the USA is the wealthiest nation in the world, (questionable) why is the Federal Government 6 trillion?

Question

in the red to....... the Federal Reserve Bank. Some say the Federal Reserve is not Federal (government owned) they only use the word Federal as a smokscreen to hide the true owners. Understandably the dollar is not backed by gold anymore....so much paper money is in circuilation, how could it be backed by gold and or silver.

Answer 1

The u.s. is not the wealthiest country in the world. There are other countries with higher per capita incomes (which is what you really meant). The federal governments deficit is small relative to total gdp. While the debt is large payments on it are negligible.

The simple reason for why the debt is so large is that the government spends more than it makes.

The Fed is part of the government. It is however designed to insulate its actions from political influence. Otherwise its actions would be based on the political cycle not the business cycle.

You are a nut job. You don't even have a conspiracy theory; you have some incoherent paranoid blabbering.

Answer 2

The government is not in debt to the Federal Reserve. It is in debt 55% to the public -- any person or entity who happens to own US treasury bond or Savings Bond. And it is 45% in debt to itself (Social Security Trust Fund, mainly). The Federal Reserve only holds some bonds as part of its operations to control the money supply (it buys and sells them to banks to control cash available to lend).

If you are wondering why the government of a wealthy nation has debt, well why not? 45% of the debt is the Social Security "trust fund", a necessary result of the accumulated Social Security Surpluses. As for the debt to the public, any corporation or financially savvy person understands the value of debt financing. Sometimes the best way to optimize wealth is to borrow money. The US government, after all, can borrow all it wants very cheaply.

If a corporation could borrow all the money it needs at 4.5% with no possibility of default (which is exactly the case with the US gov't), it would have a lot of debt too.

Answer 3

Extravagant spending! The hundreds of billions of dollars spent on Iraq based on false reports or the useless money wasted on 100+ military bases around the world doesn't help with the account.

So much in paper money is backed only by the confidence people have in the economy. And if the current fiscal policies continue then it is ought to go downhill and gloomy days will be just around the corner if not already here!